Watchdog Online

Brunner property liquidation case is a battle

Efforts to liquidate a portion of Todd Brunner's financial empire - a portfolio that includes pricey cars, boats and about 200 pieces of property - are off to a contentious start, with his largest creditor asking that Brunner be cited with contempt and jailed for refusing to cooperate.

In other words, the latest court action is progressing very much like Brunner's failed bankruptcy bid.

"I can't recall a case that where you had this many properties and this many competing claims, was this contentious and had this much litigation following the dismissal of the Chapter 11 (bankruptcy)," said Michael Polsky, a Milwaukee attorney who specializes in receiverships. "There isn't a lot of history as far as what happens now."

Polsky, who is not involved in the case, said litigation may drag on for years as creditors try to collect on some $20 million owed by Brunner, who has bought and sold hundreds of foreclosed properties over the years and whose penchant for driving pricey cars and boats often aggravates his creditors.

When Brunner filed for bankruptcy last year, he listed about $20 million in assets including about two dozen boats and cars - a roster that included work vehicles, three boats, a Bentley and a Rolls-Royce. He owns some 200 properties with a value of about $20 million, although many were encumbered by loans.

Bankruptcy Judge James Shapiro dismissed Brunner's bankruptcy case April 4 after declaring that the 55-year-old Brunner tried to hide assets in an attempt to deceive creditors.

In Fond du Lac County, prosecutors dropped a felony charge against Brunner that alleged he wrote a worthless $13,372 check. The charge was dropped in May after Brunner paid the debt. However, investigations by the FBI and Milwaukee Police Department into Brunner's real estate and bankruptcy dealings are continuing, sources said.

In Waukesha County, Brunner has been fighting off First Business Bank-Milwaukee, which won a $2.2 million judgment against Brunner after a company he owned with two partners defaulted on a loan received to finance construction of an assisted-living center in Waupun. The center went out of business shortly after it opened.

In an attempt to collect on that note, which was guaranteed by Brunner and the partners, the bank:

Persuaded Waukesha County Judge Lee Dreyfus last month to name Milwaukee attorney Douglas Mann to be the receiver for the majority of Brunner's assets, an order that authorizes Mann to seize Brunner's assets to pay First Business Bank.

Is asking Dreyfus to find Brunner in contempt, charging that Brunner is refusing to cooperate with its receiver by not providing access to his real estate and personal property. The bank's lawyer, Dino Antonopoulos, is asking that Brunner be jailed and fined up to $2,000 a day until he cooperates.

A hearing on the motion is scheduled for Monday.

Had the clerk of courts issue writs of assistance to sheriffs in seven counties commanding them to help Mann obtain possession of Brunner's properties and other assets.

Jonathan Goodman, Brunner's lawyer, said his client is trying to negotiate with the bank, adding that he is not involved in that effort.

"I would say it's not a lack of cooperation," Goodman said. "He's trying to preserve his property in exchange for cooperating with the (First Business Bank) judgment."

Antonopoulos declined to comment, and Brunner did not return a reporter's phone calls.

Brunner's wife, Sharon Brunner, said she would deliver a message for her husband to return a call to a reporter, although she said it was unlikely he would do so.

Meanwhile, the City of Milwaukee filed a tax foreclosure lawsuit last week on 60 city properties owned by Brunner.

"We never had one person that had that many (properties) before," said Kerry Urban, special assistant city treasurer.

Each of the properties owed at least three years of back taxes. If taxes are not paid on the properties within 90 days, the court could turn the deeds over to the city, which owns about 600 homes seized through tax foreclosures. The city will manage, repair and try to sell the homes, said Jeff Fleming, spokesman for the Department of City Development.

Brunner, who owns about 140 Milwaukee properties, owes more than $1.2 million in back taxes, plus interest and penalties, records show.

Brunner had better luck in Waukesha County, which filed tax foreclosure suits against property owners April 5.

Although 14 Brunner properties in eight communities are on the foreclosure list, the properties were not included in the county's lawsuit because the court order dismissing Brunner's bankruptcy case was not issued until April 5. Debtors are protected from foreclosure suits while in bankruptcy.

Brunner owes more than $256,000 in back taxes on those 14 properties, including $30,026 on his home near Pewaukee Lake.

The reprieve, however, is temporary, said Theresa Schultz, Waukesha County deputy treasurer.

Unless taxes are paid or Brunner receives bankruptcy court protection, the county "will put (Brunner's) properties in the foreclosure process again next year," she said.

Other of his properties that become three years delinquent by next year will be included, she said.

Plus, Schultz noted, interest on back taxes, which accrues at 18% annually, will be added to his bill.